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Attracting and Serving Today’s High-Net-Worth Clients

With growing diversity of high-net-worth clients, it is important to identify ways to remodel and service their needs. This article expands on who most of today’s high-net-worth clients are, and offers solutions on how to serve and appeal to them. Plus, you will gain a deeper insight into how to continuously expand your business.

Wealth no longer lives where it once did—so start modeling your practice accordingly.

The high-net-worth (HNW) market isn’t what it once was—a small group of predictable clients. Now, there are a few trends affecting this market: The rich are getting richer (and there are more of them), and the affluent are increasingly diverse.

While these trends bode well for financial professionals, the latter might catch your attention. The rich are more diverse due to the emergence of startups and online businesses, and baby boomers passing down wealth.

Your challenge is how to better understand your HNW clients so that you can remodel your services to meet their needs and attract the younger generations.

Where’s the wealth?

Let’s start by looking at where wealth is being accumulated because it’s not quite how it used to be. These days, wealth is transitioning to younger generations through different means:

• Inheritance: Boomers are passing on, and in the meantime, passing off their wealth to their kids. In what’s quickly become known as “The Great Wealth Transfer,” an expected $30 trillion will be passed down from baby boomers to Gen X to millennials.

• Startups: When our latest recession set in, unemployment spiked. While this spurred a lot of negatives, the effects of which are still being felt amongst certain age groups, one thing that did emerge is a renewed focus on innovation. With it came the launch of startups, especially in the tech sector, which gave and continue to give younger people ease of entry into the business environment, with the potential to capitalize on low overhead and tech advancements and create profitable ventures.

Consider the story of Brenton Hayden, founder of Renter’s Warehouse. He founded the company during the real estate downturn of 2007, and quickly went from being broke and evicted to running a multimillion dollar property management empire and retiring at the age of 28. Stories like this are not as shocking as they might’ve been just a decade ago.

• Online empires: Making millions doesn’t require a startup office with a ping pong table and everyday happy hours. Younger generations are naturally digital forward, and aren’t afraid to start purely online ventures that don’t necessarily take the traditional startup form, but have the potential to garner millions, nonetheless.

What does this mean for you as an advisor? Your previous HNW client base that you spent years accumulating and nurturing—those who valued in-person meetings, paper statements, and all the traditional tenets you built your business on—is transitioning, and their beneficiaries desire and require a different way of doing business. Once you shift your viewpoint to the fact that wealth doesn’t just live where it once did, you can start to act to earn HNW clients’ trust and serve them better.

Serving today’s HNW client

Here are a few steps you can take to prove that you’re the right advisor for today’s “typical” HNW client.

1. Use non-traditional communication methods. Snail mail is still OK for birthday cards, but most of the younger generations agree that statements and communication in the mail do not cut it. Alternative forms of communication you can try include email, text messaging and video conferencing. Find out how your clients like to communicate and make yourself available in that way. And always keep an updated, clean, responsive website where they can turn to for information when they can’t (or don’t want to get hold of you.)

2. Provide an online platform for them to aggregate and control their wealth. Technology is most appreciated when it makes lives easier. Leverage that appreciation by creating an easy-to-use, at-aglance dashboard for your clients to easily aggregate accounts and monitor their wealth. Access anywhere at any time provides them with peace of mind, and online collaboration gives an always-there feel to your relationship. Worth noting here: Remember that this is to supplement the personal touch they get from working with an advisor they can lean on—not in place of that.

3. Put security and transparency first. In providing technology to satisfy the digital-forward nature of today’s HNW clients, it’s important to focus on ensuring absolute security and maintaining transparency. Rightly so, any HNW client is going to be especially concerned with the security of online platforms; so treat yours like a digital fortress. And don’t just take extra precautions to ensure security. Be as transparent as possible with how online tools work, and what they need to know to calm their fears.

Bottom line? Be tech-forward based on your clients’ needs, and make sure you’re guaranteeing security. Also, don’t wait for them to come to you. Once you have a better understanding of the market and you’ve taken steps to work in the way your potential HNW clients want to work, start telling your story so you can do what you do best: Advise them how to grow that wealth even more.

Christopher Van Slyke, CFP, is the founder and a partner of WorthPointe, a fee-only financial-planning firm in San Diego. More information can be found at www.worthpointeinvest.com.